Asked by
Julian Quintana
on Nov 05, 2024Verified
Ameritech has a monopoly over local telephone service. If Ameritech is producing where marginal revenue is less than marginal cost, the firm
A) could increase profits by reducing output.
B) could increase profits by increasing output.
C) is maximizing profits.
D) must be earning a zero profit.
Ameritech
A telecommunications company that was one of the Regional Bell Operating Companies following the breakup of AT&T.
Marginal Cost
The incremental cost of fabricating one more unit of a product or service.
- Analyze how monopolists adjust output and pricing in response to marginal costs and marginal revenue.
Verified Answer
HZ
Learning Objectives
- Analyze how monopolists adjust output and pricing in response to marginal costs and marginal revenue.